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Cody4533
March 23, 2020
Question

Paying non-1099 vendors with direct deposit

  • March 23, 2020
  • 15 replies
  • 0 views

Can I use vendor direct deposit for vendors that are not 1099? Thanks. 

15 replies

Anna S
Anna S
March 23, 2020

Hi there, @Cody4533.

 

Allow me to provide some more information about vendor direct deposits.

 

When you use vendor direct deposit, you're paying the vendor and recording the transactions to calculate their 1099s. This means you'll want to pay the vendor that doesn't have 1099 using another form of direct deposit. You'll also want to send the payroll to Intuit before 5 p.m. Pacific Time, two federal banking days before the paycheck date to ensure it processes on time. You can check out this article for more information: Send payroll and direct deposit paychecks.

 

Feel free to drop a line below if you have any other questions. I'm always here to help.

Cody4533Author
March 23, 2020

Thank you for your response Anna.I use direct deposit for employees' payroll. Is ACH a payment option since Intuit does not allow direct deposits to non-1099 vendors? Due to the COVID-19 pandemic, some of my non-1099 vendors would prefer to get paid electronically so they don't have to rely on the mail and the going to the bank to deposit their monthly check. 

Candice C
Candice C
March 23, 2020

Good Evening, @Cody4533. 

 

Thanks for reaching back out to the Community. There are two options available for you to pay your vendor(s). Either by check or credit card. Here's how to get there: 

  1. Go to the Vendors menu. 
  2. Choose Pay Bills. 
  3. Check the bills you'd like to pay. 
  4. In the payment section, press the Method drop-down arrow and select either Check or Credit Card. 
  5. Once you're finished, hit Pay Selected Bills. 

Here are two additional links that could help you out if you have a 1099 Vendor that you'd like to pay with direct deposit:

Should you need any further assistance, don't hesitate to contact me. I'm always here to lend a helping hand. Have a great week ahead!

RTCM
November 28, 2021

Everyone is avoiding the question.

 

Why can't we pay non-1099 vendors through direct deposit?  Please be specific.  Is there a banking regulation that prevents us from doing this?  If so, please provide a link?  Is there a federal regulation that prevents us from doing this? If so, please provide a link.  Are there state regulations that prevent us from doing this.  If so, please provide a link(s). 

 

Here is what Inuit says (What Federal and State compliance requirements?)

 

Solution

In order for Intuit to meet Federal and State compliance requirements on a consistent basis across all of our offerings, the Intuit Direct Deposit service cannot be used to pay bills or make payments to individuals or entities who are not independent contractors. WHY?

 

We currently pay our "ACH" vendors through our bank, which is double work.  

 

RenjolynC
RenjolynC
November 28, 2021

Thanks for chiming in on this thread, RTCM.

 

Let me share some insights regarding this question.

 

Intuit follows both the Federal and State laws to maintain payroll compliance. The reason why you're unable to pay a non-1099 vendor through direct deposit is because they are processed in different ways.

 

The 1099 and bill payments are separate financial transactions, and must adhere to different standards.

 

As per the IRS rules, any vendor that is marked as a 1099 Independent Contractor, must receive a 1099 at the end of the year. This process is much like an employee would receive a W-2.

 

In addition, 1099 vendors require a specialized tax filings. To learn more about the 1099 forms, you can read this link: Reporting Payments to Independent Contractors.

 

When it comes to paying your non-1099 vendor, please check out the following options:

 

  • You can use the Online Bill Payments feature. Please see Use Online Bill Pay in QuickBooks Desktop for more details. 
  • Use a third-party service program.
  • Use your bank institution to facilitate to direct deposit.
  • Print and mail payment checks from QuickBooks Desktop using the Write Checks or Pay Bills modules.

For reference about the error and to help manage the direct deposit for your contractors, feel free to read these guides:

 

I'll be around if you have more questions or need help with other concerns. Have a good day ahead.

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